Before Don Stapleys Indictment, There Was the Land Deal

Sheriff's deputies started investigating Don Stapley's financial disclosure forms just a few weeks after his connections with Conley Wolfswinkel were raised in a court hearing.

Behind the year's most shocking indictment — 118 criminal counts filed last month against Maricopa County Supervisor Don Stapley — is a bizarre tale of a land deal turned ugly, a $360 million jury verdict reduced to nothing, and a political fundraiser hosted by one of the Valley's most influential law firms.

This particular story-behind-the-story has been playing out for nearly a decade now. But some political insiders believe the tipping point for Stapley may have come in December 2007, when he made the near-fatal mistake of showing up in a courtroom to support an old high school friend.

It wasn't just any high school friend. It was Conley Wolfswinkel, the East Valley land baron who became a poster boy for avarice in the late-'80s savings-and-loan scandal. This time around, Wolfswinkel was being sued by a group of investors over his 2003 purchase of 13,000 acres in Buckeye.

Stapley may have thought he could just quietly sit in the courtroom, listen to the closing arguments, and lend his support.

He was wrong.

The jury returned a huge verdict against Wolfswinkel — but the judge on the case subsequently threw it out. Court records show that, at that point, Stapley's appearance triggered scrutiny from lawyers representing the investors. Stapley's business ties to Wolfs­winkel were raised with the county's presiding judge in a conference call; the investors' lawyers suggested Stapley's presence may have improperly influenced the judge.

Within two weeks of that phone call, County Attorney Andrew Thomas and Sheriff Joe Arpaio initiated their investigation of Stapley. Their probe focused on Stapley's ties to Wolfswinkel.

It might all seem like an amazing coincidence, except for one thing.

One of the land investors, a guy who's spent the past decade trying to stop Conley Wolfswinkel, is Andrew Thomas' attorney.

At this point, there's no way of knowing exactly how the county's investigation into Supervisor Stapley began. At their joint news conference to discuss the case last month, Sheriff Arpaio and County Attorney Thomas said only that they'd received a "tip," and that the investigation started in May.

Many insiders believe the source of that tip is Thomas' attorney, Leo Beus, a prominent guy in the Mormon community and partner in a firm that represents most of the big developers in town. But in a phone call with New Times, Beus flatly denied ever talking to Thomas about the case.

"I have no idea how Andrew Thomas got any information about it," he says. "I never, ever spoke to Andrew Thomas about this." Beus adds that he considers Stapley a friend.

"I have no desire to do him any harm at all," he says.

Dan Dowd, one of the attorneys representing Beus' investor group on the deal, says the same thing: "Our office never had discussions with the county attorney on any of this."

That certainly may be true. But the facts point to, at minimum, one hell of a coincidence.

Here's what the record shows, according to court files, county financial records, and campaign finance filings.

In 2007, Andrew Thomas hired Beus and his partner, Paul Gilbert, to represent him in a showdown with the State Bar of Arizona.

At the time, Thomas was facing 13 different Bar complaints. The Bar wasn't happy about how Thomas had sought to stop Judge Timothy Ryan from hearing all criminal cases because of Ryan's stance on immigration. Nor did the Bar appreciate comments Thomas had made to the media, criticizing the judiciary, or his appointment of a special prosecutor with clear conflicts of interest in the botched New Times investigation. (See "Andrew Thomas Fights to Seal Wilenchik's State Bar Secrets," June 26, 2008.)

Thomas was in the fight of his political life. And Beus proved to be just the right attorney to help Thomas win it.

Beus' selection initially surprised insiders. His firm is a powerful one — but it specializes in land-use issues.

No matter. Beus took on the task of defending Thomas with an intensity far beyond the usual role of a lawyer. He took the Bar to task in the media, in a special action to the state Supreme Court, and in conversation to anyone who would listen. With Dan Cracchiolo, his co-counsel on the matter, Beus even paid for a full-page ad in Arizona Attorney, the Bar's in-house magazine, claiming the Bar was on a witch hunt.

"We write this letter, not as Mr. Thomas' attorneys, and pay for this space at our own personal expense because we have something to say that all Arizona lawyers may want to hear," they wrote.

In direct response to Beus' complaints, the Bar agreed to remove its chief counsel from the case and appoint an independent investigator; sources tell New Times the case against Thomas has been foundering ever since. Score one for Leo Beus.

Over the past five years, Beus and his lawyers brought the same relentlessness to their fight against Conley Wolfswinkel — the legal battle that would eventually draw Supervisor Don Stapley to the courtroom as a spectator.

The issue is a land deal. Beus was part of a group of investors that owned 10,000 acres in the West Valley. In 1998, the managers of that group entered into contracts to purchase another 3,000 acres and then sell the whole parcel to a company called Breycliffe. The price: $5,000 an acre, plus 20 percent of the profit if Breycliffe was able to sell it to a developer.

Attorney Dowd, who represents Beus and the investors, calls the deal "remarkably one-sided." The managers, he said, weren't representing the best interests of the group. (Dowd believes Beus and his friends could have gotten as much as $23,000 per acre.)

According to court records, the investors' ire only increased when Breycliffe handed off its interest in the acreage to a company controlled by Conley Wolfswinkel. If they were worried before that they'd been swindled, well, now that a man they considered a near-professional swindler had the property, they were sure of it. The investors filed a lawsuit against their group's managers — and Wolfswinkel.

The litigation has been hopelessly complex: partners turning on partners, a total of three separate lawsuits, and at least one appellate court decision. (Needless to say, the fight is ongoing.)

The key detail for purposes of this story is what happened in late 2007: Beus and his partners' lawsuit against Wolfswinkel went to trial. The jury returned a staggering $360 million verdict — $171 million of it against Wolfswinkel.

Then came the stunning reversal.

Three months after the jury verdict, in February 2008, the judge who presided over the trial threw out the jury's decision. Maricopa County Superior Court Judge Edward Burke ruled that evidence of Wolfswinkel's past legal troubles should never have been permitted — and that testimony about previous litigation involving the acreage in question should have been.

Ultimately, Judge Burke didn't just cancel the judgment against Wolfswinkel. He actually overruled the jury and said that Wolfswinkel's side had flat-out won the case. Then he ordered Beus and his group of investors to pay some $34,000 in court fees.

The investors were livid. From court records, it's clear that they believed the fix was in.

A case like this can do that. When so much is at stake, and litigation drags on for so long, the parties involved can easily be driven to obsession, even paranoia. It's easy to see how the investors and their lawyers might have reached the brink on this one: They'd finally won the lottery, only to have a judge snatch their winnings away and declare them the loser. Anyone, at that point, might have begun to see a conspiracy.

And the facts in this one were a bit odd. Attorney Dowd says he and his partners learned about Judge Burke's reversal when they got a call from a reporter at the Arizona Republic. Burke's decision hadn't even been officially entered into the record, but somehow, Dowd says, Wolfswinkel's public relations guy knew all about it.

The investors began to wonder about Judge Burke — and the county supervisor who'd shown up to observe him.

In March 2008, the investors filed a motion, seeking to have Burke kicked off the case. "[T]his extreme relief is wholly warranted, indeed mandated, by the extreme circumstances presented — circumstances that compel the inescapable conclusion that Judge Burke was not impartial or, at minimum, his 'impartiality might reasonably be questioned,'" wrote attorney Dowd.

The decision about Burke would rest in the hands of the presiding judge of the court's civil division, Mark Aceto. Aceto agreed to hold an oral hearing. On May 1, Dowd filed a list of prospective witnesses for the hearing. Don Stapley was on the list.

In a telephone conference on May 2, Dowd's associate, Ronald Cohen, explained to Judge Aceto why Stapley was on the witness list.

"We listed Mr. Stapley because . . . we understand [he] made an unannounced attendance at the closing argument of our case," Cohen said. "Mr. Stapley, as far as we know, had nothing to do with our case, but we are reliably advised that much of his savings is invested in Wolfswinkel's projects."

Cohen then claimed that half of Judge Burke's salary was decided by Stapley and his colleagues at the Board of Supervisors. (That's actually inaccurate: The county does pay half the salary of county judges, but compensation is set by a state agency.) "We have always been curious why he suddenly showed up at closing argument in the case, given as Your Honor knows that half of the decision on judicial compensation is made by the court on which he serves . . ." Cohen said.

Ultimately, the lawyers decided against calling Stapley as a witness. (They ended up focusing on another theory: the presence in the courtroom of the father of a former client of Judge Burke's.)

But it's interesting to note the timeline: Just three weeks after the telephone conference in which Cohen noted that "much of" Stapley's savings were invested with Wolfswinkel, sheriff's deputies showed up at the clerk of the board of supervisors, seeking Stapley's financial disclosure statements.

Those statements proved not only the center; they were literally the entire case against Stapley.

And here's another bit of strange timing.

The same week that sheriff's deputies pulled Stapley's disclosure forms, Beus and his partner, Paul Gilbert, threw a fundraiser for Andrew Thomas at Gilbert's home.

The people contributing the maximum amount to Thomas' campaign include Beus, Gilbert, a host of lawyers from the firm that handled their case against Wolfswinkel, and at least three other investors who were burned by Judge Burke's verdict.

So let's review.

Judge Burke unceremoniously tossed out the $171 million verdict against Conley Wolfswinkel.

The losers in that decision believed that Don Stapley may have been a factor. And, they were actively raising money for Andrew Thomas — even as Thomas began to develop the case that would indict Stapley on 118 counts.

And here's the icing on the cake.

When Thomas held a press conference to announce the charges against Stapley, he made Wolfswinkel Exhibit A. Never mind that Wolfswinkel was accused of no wrongdoing in his dealings with Stapley. The press release from Thomas actually trumpets Wolfswinkel's involvement — and his past — in the very first paragraph. So it's not just the timing of the indictment that's odd; the emphasis on Wolfswinkel is odd, too.

Perhaps Thomas has a good answer for all this. But it's impossible to say what it could be; he didn't respond to several messages seeking comment.

The question of who triggered Thomas and Arpaio's investigation would be less important if the charges against Stapley weren't so petty. In essence, the supervisor is facing 118 criminal counts — most of them felonies — for failing to disclose his business' real estate dealings. In most places, that would earn you a slap on the wrist, not years in prison.

And so the question is, why would Thomas throw the book at Stapley for an infraction that half the officials in the county have probably committed at one point or another?

Indeed, even Sheriff Joe Arpaio has made a mistake or two on his forms. My investigation of county records shows that Arpaio:

• Failed to disclose his acquisition of two commercial properties in April 1995. Arpaio paid $250,000 cash and later had the court seal documents related to their acquisition. (New Times writer John Dougherty first reported the acquisition in this newspaper; Arpaio never listed it on his public disclosure forms.)

• Failed to disclose the April 1996 sale of a rental property on Indian School Road in Phoenix.

• Failed to disclose the November 2000 purchase of a Fountain Hills condo. County records show Arpaio again paid cash. He disclosed the sale of the condo on his forms covering the year 2001, but never listed the purchase on his year 2000 forms.

Lisa Allen MacPherson, a spokeswoman for the Sheriff's Office, e-mailed me in December to say that Arpaio "has and is complying with regulations regarding Arizona financial disclosure statements."

That's hardly a convincing rebuttal. But Arpaio undoubtedly has nothing to worry about. He and Thomas are a team, and — whether it's investigating Attorney General Terry Goddard, siccing an "independent" prosecutor on New Times, or fighting the Board of Supervisors, they're going to do it together.

Thomas has been willing to fight just about anyone over anything. Even now, after he indicted one of their own, he's threatened the board of supervisors over their audacity to ask a lawyer for advice. (The supervisors, to their credit, ignored Thomas and hired his archenemy, former county attorney and fellow Republican Rick Romley, to do the job.)

But there's no way Thomas is going to take on Sheriff Joe, no matter how many mistakes he's made in his disclosure forms.